Entre ch 10

Name three ways a business can reduce its disbursements.

-Gain control over inventory and payroll -Slow the rate you pay bills -Reduce expenses

The level of inventory a business keeps in stock depends on three factors. Name them.

-The costs of carrying inventory -The costs of lost sales due to stock outs -Your stock turnover rate

benefits offered by employers

.

Guidelines for the daily operations of a business are called

Procedures

Which of the following is not generally thought of as part of the organizing function? Select one: a. strategic planning b. allocating resources c. organizing tasks into departments d. assigning tasks

A: strategic planning

What is management?

Achieving goals by establishing operating procedures that effectively uses people and resources.

To ensure accuracy, on what should a cash budget be based?

Actual past revenues and operating expenses

The ____point is the volume of sales that must be made to cover all of the expenses of a business.

Breakeven

Two businesses with the same level of sales and expenses will have the same cash flow.

Flase

Which of the following is not a strategy a business can use to encourage faster payment? a. all of the above b. offer discounts on bills paid right away c. hire a collection agency to track down customers who are late with their payments d. increase the amount of time your customers have to pay their bills

D: Increase the amount of time your customers have to pay their bills

All of the following are concerns about inventory that managers must address except a. not ending up with out-of-date items. b. maintaining a wide assortment of stock. c. keeping stock levels as low as possible without sacrificing performance or service. d. reducing inventory turnover.

D: Reducing turnover

A management style in which employees are involved in decision making and the manager provides less direction is called

Democratic Management

3 factors that make a risk insurable

Determine what can go wrong, develop a plan, communicate your plan

How do you find the net-profit-on-sales ratio? %

Divide income after taxes by net sales

How is the net-profit-on-sales ratio calculated? Explain two ways this ratio can help a business.

Divide income after taxes by net sales -Can help determine profitability -Set and meet profit goals

As a business owner, it is important for you never to make exceptions to rules, policies, and procedures once they are established because if you do, customers and employees will become confused. True False

False

Increasing payroll can improve a business's cash flow. True False

False

Organizing involves directing and leading people to accomplish the goals of the organization. True False

False

Rules, policies, procedures, and budgets are important components of strategic planning. True False

False

The cost of insurance tends to decrease as the value of the inventory insured increases. True Flase

Flase

The perpetual inventory method keeps track of inventory levels on a weekly basis. True False

Flase

___ sales is the dollar amount of the sales

Gross

What is the most important aspect of inventory management?

Having items in stock when they are needed.

Explain what a point-of-sale software system is and how it is used

It updates the inventory records as each sale happens. You can analyze the sales data, determine how well each item is selling, and and adjust your purchasing accordingly.

The person in a business who is responsible for planning, organizing, staffing, implementing, and controlling the operations of a business is the

Manager

Combing authoritative and democratic management styles is called ___ management

Mixed

The dollar amount of all sales with any returns subtracted is called

Net sales

How do you find the gross profit for a business?

Net sales - cost of goods sold

A ___ manual contains all of the rules, policies, and procedures that a business should follow in order to function effectively.

Operations

This inventory method involves taking a physical count of your merchandise at regular intervals, such as weekly or monthly

Periodic inventory method

What is planning? Name and describe the three types of planning commonly used in business.

Planning is an organizational process. -Strategic planning(setting broad objective to achieve long-term goals looking 3-5 years ahead) -Intermediate-range planning(preparing detailed plans to achieve goal within a year, setting target completion dates) -Short-term planning(planning day to day operations to achieve goals in an intermediate range, including rules policies and procedure)

Beginning inventory + Purchase - ____ = Ending inventory

Sales

___ includes all of the activities involved in obtaining, training, and compensating the employees of a business.

Staffing

A ___ card is a paper inventory record for a single item.

Stock

An organizational ___ is a plan that shows how the various jobs in a company relate to one another.

Structure

What is management style?

The way a manager behaves toward and works with employees

Comparing actual revenues and expenses with what was projected is an example of the controlling function of management. True False

True

One way to improve your cash receipts is to decrease your accounts receivable by getting customers who owe you money to pay more quickly. True False

True

Procedures are more specific than rules. True False

True

Successful inventory management involves balancing the costs of inventory with the benefits of having inventory in stock. True Flase

True

The minimum amount of merchandise a business wants to keep in inventory is often referred to as the reorder point. True False

True

The three most important elements of a company's financial strength are its assets, liabilities, and owner's equity. True False

True

The stock ___ rate is the rate at which the inventory of a product is sold and replaced with new inventory.

Turnover

Explain under what circumstances the authoritative management style is best used. Under what circumstances should the democratic management style be used?

Used in a crisis situation when there is not enough time to let the group participate in the decision making process. Also used in a new group of employees who do not have previous experience in the type of work being performed._Used when staff is more experienced and enjoy having a say in the decision making process.

The costs of holding inventory are known as ___ costs

carrying

This type of budget shows the projections of a business's cash flow.

cash budget

The process of setting standards for the operation of a business and ensuring those standards are met is called

controlling